MIXED RULING IN WHISKEY-BOTTLE SUIT
STAMFORD — The design of Stamfordbased Deutsch Family Wine & Spirits’ Redemption whiskey does not infringe on the trademark rights of alcoholic-beverages giant Diageo’s Bulleit whiskey, a jury in federal court in New York ruled last week.
Among its key findings, the jury did not agree with Diageo’s claim that the Redemption bottle design “creates a likelihood of confusion” with the registered Bulleit packaging trademark. At the same time, however, it concluded that the Bulleit bottle was entitled to trademark protection and that the Redemption design “created a likelihood of dilution” of the Bulleit packaging trademark. Nonetheless, it did not award Diageo any damages.
“This ruling supports the fact that Redemption is a special brand that consumers view as differentiated from Bulleit,” Deutsch President Tom Steffanci said in a statement. “We look forward to continuing to fuel the amazing growth we are experiencing on Redemption’s rye-forward American whiskeys.”
A Diageo spokesperson said in a statement that, “based on this verdict, Diageo intends promptly to pursue all available legal remedies, including the entry of an injunction to halt use of any advertising, promotion or sale of the current packaging, and to require a packaging change for the accused Redemption line of products.”
Deutsch officials said the company intends to appeal the jury’s finding on the dilution of Bulleit’s packaging trademark.
In an additional statement provided by a spokesperson, the company also said that, “Deutsch continues to think that it has a strong claim that Diageo made fraudulent representations to the U.S. Patent and Trademark Office when Diageo originally applied for its Bulleit trademark registration. Deutsch intends to appeal the validity of the registration.”
The jury ruled, however, that Deutsch had not shown “clear and convincing evidence” that Diageo obtained the Bulleit trademark registration through “intentional fraud.”
The Diageo spokesperson said that, “Deutsch’s fraud claim utterly lacks merit and the jury decided as much. Diageo’s famous Bulleit trademark is being diluted and harmed every day Redemption remains on the market in its current packaging.”
In 2017, London-headquartered Diageo’s North American business sued Deutsch, alleging in the complaint that Deutsch had engaged in “willful acts of trademark infringement, unfair competition, and dilution” and “redesigned the bottle and label for a line of its whiskey beverage products in order to knock off the appearance and unfairly trade on the reputation of Diageo’s extremely popular Bulleit brand bourbon and rye whiskey.”
Deutsch denied Diageo’s allegations, asserting in a filing that the Bulleit bottle “contains functional shapes and designs and generic words that are not subject to exclusive appropriation, not subject to trademark or trade dress protection and not capable of acquiring distinctiveness or secondary meaning, individually or collectively.”
In its 2022 fiscal year — running from April 1, 2021 to March 31, 2022 — about 120,000 Redemption cases were “depleted” or shipped from distributor partner to retailers, comprising a 33 percent year-over-year increase. Redemption is sold in the U.S., Canada, Caribbean region, many countries in western Europe and other nations such as Japan, South Korea and Australia.
Bulleit is also an international brand. In the U.S. spirits market, Bulleit’s net sales decreased 19 percent, and the brand “lost share of the U.S. whiskey category due to glass supply constraints, which impacted production volumes,” according to the company’s interim financial results report for the six months ending Dec. 31, 2021.
Coincidentally, Deutsch and Diageo are neighbors in downtown Stamford. Deutsch is headquartered at 201 Tresser Blvd., with about 140 employees based there. A couple of blocks away, more than 200 Diageo employees are based at 200 Elm St., a location that supports the company’s North American headquarters in Manhattan. Before moving to Manhattan, Diageo’s main North American offices had been located in Norwalk since 2004, following an earlier stint in Stamford.